SA Sees Debt Peaking at 78.1% in 2025-26, Deficit at 7.8% in 2021

• Statement here: http://www.treasury.gov.za/documents/mtbps/2021/mt...
• S.AFRICA SEES DEBT PEAK 78.1%/GDP IN 2025-26; SAW 88.9% IN FEB.
• S. AFRICA CUTS 2021-22 GROSS BORROWING BY 73B RAND TO 475B RAND
• *SOUTH AFRICA TREASURY SEES 3Q GDP LIKELY CONTRACTING
• S. AFRICA SEES BUDGET GAP AT 6%/GDP IN '22-23; 5.3% IN '23-24
• S.AFRICA SEES GDP EXPANDING 5.1% IN 2021, AVG 1.7% IN 2022-2024
• S. AFRICA EXPECTS TO COLLECT 120.3B RAND MORE IN '22 THAN EST.
• SOUTH AFRICA ALLOCATED 2.9B RAND TO DENEL FOR DEBT REPAYMENTS
• S. AFRICA SEES 2021-22 BUDGET GAP AT 7.8%/GDP; SAW 9.3% IN FEB.
• S. AFRICA SEES PRIMARY BUDGET SURPLUS OF 0.2%/GDP IN 2024-25
• S. AFRICA PROPOSES SPLITTING ESKOM DEBT BETWEEN 3 NEW ENTITIES

Early thoughts:

• Good debt peak numbers, close to the lower side of our expectations
• Reduction in issuance of R73bn as expected
• Wider deficit foreseen in 2021 at 7.8% vs 7.1% median, close 2022 deficit target at 5% vs 4.9% exp, but wider 2023 defict at 5.3% vs 4% exp